Essar Oil picks Trafigura, BP for $1 billion oil-backed loan

Trafigura and BP will lend $1 billion to Essar Oil as the latter seeks to diversify its financing base. The loan will be repaid with cargoes of refined products. Essar has been in talks with traders since late 2017 to raise cash in exchange for refined products such as gasoline and gas oil delivered over three to four years. This will be Essar’s first major multi-year prepayment facility. Trafigura and BP are jointly working to structure and syndicate the loan with banks at the earliest. One of Essar’s owners, Rosneft has been under US sanctions since Russia’s annexation of Crimea in 2014. This could complicate the funding process.